Lawn Care Services Exceeding 5% of Total Charge Taxable in Texas

Jan 30th, 2019

The Texas Comptroller recently ruled that a lump sum charge for both real property services and other services was taxable.

Texas taxes sales that include taxable services and nontaxable services if (1) the services are sold for a single charge, and (2) the taxable services are worth more than 5% of the total charge. Taxable services include mowing, trimming, fertilizing, watering, and any other treatment or service performed on private or commercial yards or lawns.

Here, the taxpayer owned a golf course on a capped landfill. The taxpayer requested a refund on a lump sum payment for several services. The services included lawn and yard maintenance, landscaping, structural pest control, and waste removal services.

The Comptroller ruled that the taxpayer was not entitled to a refund. The lawn and yard maintenance portion of the lump sum payment accounted for more than 5% of the total charge, so the whole charge was taxable.